London Stock Exchange Partners with Payward to Tokenize 100 UK Stocks

The London Stock Exchange Group (LSEG), which operates the London Stock Exchange (LSE), has announced a partnership with Payward, the parent company of the cryptocurrency exchange Kraken, to advance the tokenization of UK-listed stocks.

Payward and the London Stock Exchange have partnered with the aim of modernizing the UK equity market. The LSE plans to list all stocks from xStocks on LSE 24, pending regulatory approval. In the future...

Under this agreement, Payward will offer the stocks of the top 100 companies listed on the LSE as tokenized shares called "xStocks." Each xStock will be backed 1:1 by the underlying shares, targeting eligible investors in over 110 countries. However, xStocks are currently not available to UK investors.

Plans for Listing on LSE 24 in 2027, Supporting 24-Hour Trading

Subject to regulatory approval, xStocks are expected to be listed on LSE's new trading platform "LSE 24" in 2027. LSE 24 is planned to support 24-hour trading from Monday to Friday, aiming to create an environment where access to the stock market is available outside of traditional trading hours.

Payward's xStocks have recorded over $40 billion in trading volume, with approximately $20 billion settled on-chain, and have more than 200,000 holders.

Both companies are also expected to explore access through wallets and blockchain infrastructure, as well as connections with the regulated markets operated by LSEG. Additionally, they are considering the direct issuance of Native Equity Tokens through LSE's infrastructure (i.e., digital securities issued natively on the blockchain, known as security tokens).

These tokens are expected to carry shareholder rights equivalent to traditional shares and be fully interchangeable with the corresponding existing shares.

Exploring New Models for Stock Distribution by Connecting Regulated Markets and Blockchain

Arjun Sethi, Co-CEO of Payward, explained that this partnership connects access to blockchain with a reliable financial market infrastructure. It demonstrates the potential for the cryptocurrency market and traditional financial markets to function on the same foundation rather than compete with each other.

Julia Hoggett, CEO of the LSE, pointed out that tokenization could change how investors and issuing companies access financial markets, while emphasizing the need to maintain the reliability of regulated markets and the rights and roles of investors.

This partnership aims to establish a framework for handling major UK-listed stocks on the blockchain. It is noteworthy as a move to incorporate new mechanisms for trading and settlement through tokenized shares while maintaining existing market infrastructure.

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